Ukraine’s main international airport could reduce growing passenger congestion with the construction of two new terminals over the next couple of years
Ukraine’s main airport, Boryspil International, could reduce growing passenger congestion with the construction of two new terminals over the next couple of years if airport authorities can finalize a deal with the country’s leading carrier, Aerosvit.
And with Ukraine scheduled to host the 2012 European football championship jointly with Poland, the country is going to have to move things along quickly.
The airline has been locked in a legal tug of war with airport authorities since early 2005, when a Ukrainian court challenged Aerosvit’s 2003 acquisition of land for construction of a fourth terminal at Boryspil.
Airport authorities accused Aerosvit of illegally obtaining the building site through patronage from former President Leonid Kuchma. They said Kuchma pushed through the deal on behalf of his son-in-law, Viktor Pinchuk, who had an interest in Aerosvit.
The management of Aerosvit, which is 24 percent state-owned, denied that the airline is controlled by Pinchuk, but acknowledged that he had a 25 percent stake through a company called GenAviaInvest.
The airport authorities used a court decision from the spring of 2005 to halt construction of Aerosvit’s new terminal, which they said would stunt development of their own fledgling terminal project.
Now, after more than two years of court battles played out in the media, the government has called for a peaceful resolution of the conflict. The Cabinet passed an order late last month that recognized the airline’s right to build an additional terminal.
The head of Boryspil’s press service, Ludmila Petrova, told the Post the project being tabled is the creation of a joint venture between Aerosvit and Boryspil to be called Aerosvit Terminal, which will be 41 percent owned by the airport and 59 percent by Aerosvit. In addition, Boryspil will move forward independently on its own terminal, which is being funded primarily by a development loan from the Japanese government.
“This is all about money,” she said, explaining the roots of the conflict between Aerosvit and Boryspil.
Looking back
In 2003, when Kuchma was still president, Aerosvit leased and then bought 32 hectares of land adjacent to Boryspil Airport for Hr 3.2 million (about $600,000), planning to take advantage of continually increasing passenger flows by building a fourth terminal. By late 2004, when Kuchma was stepping down, the airline had already started construction of its airport terminal.
In early 2005, when Kuchma had already left office, the new management at Boryspil won a court decision to block construction of the Aerosvit project, which they said would steal the wind from their project, as Aerosvit’s terminal was scheduled to be launched earlier.
“We would have ended up dependent on state subsidies,” Petrova said.
Boryspil’s terminal project, which is largely financed by a 30-year, low interest loan from the Japanese Bank for International Cooperation, entails lengthier project procedures than those encountered by a private company like Aerosvit, according to Petrova.
Boryspil, which is going to match the $172 million Japanese loan with $60 million of state funding, plans to complete its terminal by 2010.
Looking ahead
Aerosvit spokesman Serhiy Kutsy said his company’s project could be completed within a year-and-a-half of being restarted.
“Boryspil has yet to set a tender for a contractor for its project,” he added.
Kutsy stressed the importance of building new terminals at the airport to handle flocks of tourists expected to visit during the 2012 European football championship jointly co-hosted with Poland.
“Where are all the passengers lining up at Boryspil going to go, on the roof?”
Kutsy said passenger traffic through Boryspil is expected to increase by 25 percent a year between now and 2012.
Boryspil reported in 2006 a 17 percent year-on-year increase in passenger traffic to 4.6 million people.
The airport currently boasts three terminals: “A” for domestic flights, “B” for international flights and “C” for VIP passengers.
Kutsy said increasing airport traffic would justify the construction of two more terminals.
But to move forward, the sides have to sign a deal, which then must be approved by the country’s Transport and Communications Ministry and other agencies.
“Right now the most important thing is the signing of an agreement between Boryspil and Aersovit and then its approval,” Kutsy said.
The Aerosvit spokesman declined to estimate the cost of his company’s terminal project, but airline officials said in earlier interviews that they had already invested $3 million before construction was halted in 2005 and planned to invest up to $100 million overall.
The original completion date of the Aerosvit terminal was this year.
In September 2006, Ukraine’s Supreme Court ruled in favor of Aerosvit, overturning a string of earlier decisions in favor of Boryspil to cancel the 2003 land purchases.
Boryspil officials had said the Japanese bank was also opposed to the Aerosvit project, as it would hurt the terminal they were funding.
Yoshihiro Katayama, a spokesman for the Japanese Embassy in Kyiv, said his government had no direct interest in the terminal project, but was closely watching its progress.
“This is not a Japanese government project but a Ukrainian government project, for which Japan decided to offer very preferential credit,” he said.
“We want the Ukrainian national economy to develop, for which development of the country’s infrastructure is needed,” he added.
